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Should I Buy Investment Property Now or Wait for the Market to Bottom Out?

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By : marco benavides    99 or more times read
If you are an investor and you are still waiting for housing prices to bottom out, you may have already missed the boat. In fact, housing prices have not been seen this low since 2003. It is not secret that the housing market is slowly recovering from the subprime mortgage loan fiasco.

Even though housing prices were generally down for 2009, they did show an increase of at least 1.3 percent during the second quarter in 2009. If the upward price trend continues, then the housing market has already hit its bottom and investors would be well served if they were to purchase investment property at this time.

There may be another crisis on the horizon, but it should not affect the real estate market as a whole. In fact, experts are predicting that foreclosures will move upstream, meaning that they will begin to affect prime borrowers. Foreclosures will especially affect people who have option mortgages, or mortgages where the payments were artificially low during the initial period. These people will now see their mortgage payments double or perhaps go even higher. If their income has not grown to the point where it can cover the new mortgage payments, they are likely to go into default. The houses or properties that will be affected are at the higher price end and in more desirable neighborhoods.

Simply because there was an upswing in prices in the United States during the second quarter of 2009, it does not mean that prices were up everywhere in the United States. Anyone who has dealt with the real estate market is well aware that it is quite volatile and that it fluctuates regional, statewide and even within the same city.

By the end of the third quarter of 2009, 1 out of every 7 mortgages in the United States was either already in foreclosure or in default. Experts believe that 1 out of every 4 homeowners is under water, meaning that they owe more on the mortgage than what their home is worth. When this occurs, it increases the likelihood of default, as does unemployment, which is expected to be at around 10.5% during the first quarter of 2010 and then begin to recover.

What this all means is that there are still plenty of opportunities for investors to jump into the real estate market and find excellent deals. The market is rebounding overall, but it may not be the case in the area where you are planning to invest.

The smart and savvy investor will study the real estate market in his/her general area very carefully to see where the investment opportunities lie. If you are experienced in foreclosures, then opportunities abound, and there are more coming.

If you are a person who is inexperienced in real estate, then it is best to do lots of research. Contact real estate agents to learn about the market in your area. There are plenty of helpful articles on the Internet which will help you get underway. You just have to know that you are going to have to invest time so that you can invest your money wisely.
For great real estate, take a look at: Foreclosed Houses for Sale in Gold Canyon AZ, Residential Real Estate in Florence and The Islands Affordable Homes for Sale in Gilbert.

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